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According to the just published Feed Marketing Report by DataFeedWatch by Cart.com, almost ⅔ of eCommerce businesses are removing their products from advertising. This marketing strategy stems from a shift in consumers re-prioritizing their spending against a backdrop of growing inflation, an increasingly likely recession, and ongoing problems with product availability.
About the Feed Marketing Report
DataFeedWatch’s data analysis of over 15 thousand online stores across 60+ countries reveals multi-channel advertising benchmarks and retail coping strategies against the emerging challenges of 2022. The first of its kind within the industry, the Feed Marketing Report 2022 delivers an inside look into 4 critical retail areas: the Products retailers are selling, the Channels being used to advertise, the most common Errors, and the most prevalent optimization Tactics. Captured in the first half of the year, the report equips advertisers with a competitive benchmarking tool, just as we’re headed into the peak retail season.
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Retail businesses stand to face new economic challenges
According to the Bloomberg monthly survey of economists in July, the probability of a recession now stands at 47.5%, compared to only 20% in March. Retail brands are bound to shift strategies as they gradually move past the COVID-led supply issues to face the challenge of climbing global inflation, the latter paired with consumers re-prioritizing their daily expenditures.
Feed Marketing Report 2022 (FMR 2022) finds that nearly 65% of eCommerce businesses reduce the size of their advertised product catalogs due to the growing price sensitivity in the market and continued product shortages. Although a number of industries have managed to recover from constant stock availability problems, many of them are still struggling to maintain stock levels. For example, in the Vehicle & Parts and Sporting Goods industries, they still face out-of-stock levels of 57% and 40% respectively.
These shifts in marketing strategies show the need for retailers to effectively manage ad budgets (across channels like Google, Facebook, Pinterest) towards a satisfying ROI.
The FMR 2022 presents a full new landscape of today’s eCommerce:
- Retailers respond to rising inflation by discounting 26.49% of all products advertised. The Fashion sector takes the lead at 37%, and the Health & Beauty and Furniture sectors are close behind with roughly 33% discounted inventory each.
- Size makes a big difference in multi-channel strategies – retailers with the largest product offering advertise on 5x more channels than the average online shop.
- Affiliate advertising channels (such as AWIN) stand out as an outlier in the sales channel stack of an average retailer, with only 11% of sellers utilizing them.
“Most retailers continue to lean on the search-based [over 90% of merchants] and social channels [54%] as the foundation of their online presence.” says Jacques van der Wilt, General Manager Feed Marketing at Cart.com.
“However, with the looming recession and declining performance on meta channels like Facebook or Instagram, we expect the affiliate channels to grow in popularity. They pose a cost-effective way for retailers to bulletproof their revenue streams. And that’s what they need right now.” he adds.
Where is the eCommerce market headed?
Despite the economic slowdown, Morgan Stanley forecasts that global eCommerce sales in 2022 will reach the 3.3 trillion dollar mark. With this new set of challenges on the horizon and the unfaltering growth of global eCommerce, businesses are bound to look for new ways of optimizing their advertising operations. How?
The Feed Marketing Report may just hold a few answers to that.
What do eCommerce professionals say about the Feed Marketing Report?
“The report provides an understanding of the ecosystem as a whole”, says Aaron Wallace Co-Founder at Inspire Uplift Marketplace (inspireuplift.com).
He adds: “It’s very useful to know what we are doing vs other businesses, this gives us a benchmark and insights that stimulate our growth”.
Giacomo Iotti, Performance Marketing Manager at SMG Swiss Marketplace Group, says: “Feeds for online advertising are some of the most underrated tactics eCommerce marketers can use to maximize their reach and revenue.
“This report shows how your competitors use feed-based advertising and why you should also. It establishes a benchmark as well as gives inspiration for new tactics”.
Download the full report: https://www.datafeedwatch.com/feed-marketing-report
